KARACHI: Saudi King Salman has approved the extension of a deferred oil payment facility worth $1.2 billion to Pakistan till February 2024.
According to sources, the Saudi government has extended the facility through the Saudi Fund for Development (SFD). “It is expected that Pakistan will avail the extended facility from March 23 to Feb 24,” they claimed.
It may be noted that the facility was going to expire this month due to which the government of Pakistan asked for a year’s extension.
It is worth mentioning here that the SFD and Economic Affairs executed an export finance agreement for imports of crude oil and refined petroleum products from Saudi Arabia in Feb 2019 on deferred payment basis.
Sources said that Pakistan had imported oil worth $769 million in the first year and $1.11 billion during the second year under the agreement. They said that Pakistan imports oil on a deferred payment basis worth $50 million every month.
Under this facility, the Saudi government has tasked Saudi Arabian Oil Company (Saudi Aramco) and Saudi Aramco Products Trading Company to export crude oil and POL products wherein PARCO and NRL are designated importers from Pakistan due to long term crude oil agreements with Aramco.
Sources said that the Pakistani government is liable to bear the exchange rate differential due to variation in exchange rates over the period of deferred payments.
It is worth mentioning here that the government is negotiating with the Russian government for importing oil. Reportedly, the first cargo of oil from the world’s largest country will land in Pakistan in the current month.
